German business sentiment weakened in October as leaders were more worried about coming months amid the rising coronavirus infection numbers, survey data from the Munich-based ifo Institute showed on Monday.
The business climate index fell to 92.7 in October from revised 93.2 in September. This was the first fall in six months. The reading was forecast to drop to 93.0 from September’s initially estimated 93.4.
Companies were more concerned over the coming months, while they gave a slightly more positive assessment of their current situation than last month.
The current conditions indicator rose more-than-expected to 90.3 from 89.2 a month ago. The expected level was 89.8.
The expectations indicator came in at 95.0, down from revised 97.4. The score was forecast to fall to 96.5.
Today’s Ifo index is not weak enough to fear another collapse of the economy but as all of Europe is in the second wave of the virus, today’s Ifo index definitely marks the end of the rebound and the start of double-dip fears, Carsten Brzeski, an ING economist said.
In manufacturing, the business climate indicator returned to positive territory for the first time since June 2019. A great many more companies were satisfied with their current situation, while recent optimism about the coming months has evaporated, the survey showed.
In the service sector, the business climate worsened notably. Service providers were less satisfied with their current situation and their optimism regarding the business outlook disappeared.
The business climate index fell slightly in trade. While companies were more pessimistic about the coming months, they were more satisfied with their current business situation.
In construction, the business confidence stopped climbing in October. Companies downgraded their very strong current assessment. Moreover, their expectations turned somewhat more pessimistic.
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